FILMS BILL

HL Deb 07 April 1970 vol 309 cc41-87

4.23 p.m.

BARONESS PHILLIPS

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Baroness Phillips.)

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 1 [Extended functions of National Film Finance Corporation]:

On Question, Whether Clause 1 shall stand part of the Bill?

LORD DRUMALBYN

While the hosts of Midian are gathering, perhaps I could raise a point on the first clause with regard to copyright. Subsection (4) gives the National Film Finance Corpora-tion power to … acquire the copyright in any film and the right to reproduce any work in the form of a film, and may dispose of any right acquired under this subsection. To judge by what one reads in the Press, there is no absence of pursuit of copy-rights whenever anything likely comes along. I have seen cases of this in the last week or so. I am not certain how far or in what way it is proposed to use this power. Of course, it would be possible to acquire copyrights fairly widely and have a kind of copyright bank available, and I should like to know to what extent this power is likely to be used. So far as the disposing of copyrights is concerned, perhaps the noble Baroness will be able to explain to us what "dispose" means. Does it mean to sell, and does it include lending? I assume that if copyright is acquired in this way, then the assets so resulting will be shown separately in the balance sheet at the end of the year.

BARONESS PHILLIPS

As the noble Lord has pointed out, this power to acquire and dispose of copyrights is a new power. It is part of the intention to make the National Film Finance Corporation more viable as a commercial concern. As the noble Lord will know from his own experience in this department, the acquisition of copyright is an essential ingredient in the making of films. The Corporation might be able to spot a winner, acquire the copyright before the price goes up and then approach a suitable producer. The ownership of the copyright would obviously strengthen the Corporation's bargaining position and enhance their power to make a profitable deal. I assure the noble Lord that the Corporation will continue to devote nearly all their money to lending money to film makers and that very little of their resources will be used for buying copyrights.

On the question of the word "dispose", this in fact does mean to sell at a profit wherever possible. Therefore, copyrights will be shown in the Corporation's balance sheet under a general heading, but for commercial reasons they will not be itemised. I hope that I have answered all the noble Lord's points.

LORD DRUMALBYN

The noble Baroness has answered all my questions and I am much obliged to her.

Clause 1 agreed to.

Clauses 2 to 5 agreed to.

Clause 6 [Extension of objects of British Film Fund Agency].

BARONESS PHILLIPS moved Amendment No. 1: Page 3, line 40, leave out from beginning to ("with") in line 41.

The noble Baroness said: With per-mission, I will deal with Amendments Nos. 1, 2 and 4 together. All these Government Amendments relate to payments from the British Film Fund to the British Film Institute towards the cost of making films and to the National Film School. None of them involves more than a drafting change. I will deal initially with the first and last Amendments, which are directly related to each other and which give effect to an undertaking given during debates in another place when my honourable friend the Parliamentary Secretary to the Board of Trade made it clear that it was the intention that the Board of Trade, before approving grants from the levy to the British Film Institute Production Fund or towards the running costs of a National Film School, to consult the Cinematograph Films Council.

An amendment was put down with the object of making such consultation a statutory obligation on the Board of Trade, and my honourable friend said that an appropriate Amendment would be moved. The Amendment now before us fulfils that undertaking. Clause 6 as it stands at present does not achieve the objective as regards consultation with the Cinematograph Films Council, on which objective there is now, I think, general agreement. In fact, it places the obligation to consult on the British Film Fund Agency itself, and that was never the intention. The Amendment puts things right. The phrase "after consulting with the Cinematograph Films Council" is omitted from paragraphs (c) and (d) of Section 1(1) of the Cinematograph Films Act 1957 and a new subsection, sub-section (5), is added, which places on the Board of Trade the obligation to consult the Cinematograph Films Council before approving payments to either the Children's Film Foundation or to the British Film Institute Production Fund or towards the running costs of a National Film School. I think that this will meet with general approval.

As regards the second Amendment, let me say at the outset that it is not put down because of any change in intention. It has been done solely to remove doubts which arose under the clause as it stood. The doubts are twofold, and I am grateful to my noble friend Lord Lloyd of Hampstead for drawing attention to them during the Second Reading, and for his help in this matter. I am sorry that he is not able to be present to-day. First, the words "any school" which appear in the clause seem to have given rise to speculation whether other persons or bodies who run schools for the training of people in film-making (there are a number of them) might become eligible for a grant from the British Film Fund. That is not so, and was never intended to be so. The intention is to help only the National Film School, which is now in course of being set up under the guidance of a planning committee of which my noble friend Lord Lloyd is Chairman. The school is to be concerned with film-making in all its aspects, including television techniques. The school has not yet reached a stage in its development where it has become a legal entity in its own right, and we therefore have to refer to it in more general terms. The Amendment provides that the school to receive the benefit of this grant shall be the one, the only one, specially nominated for this purpose by the Secretary of State.

Secondly, the clause as drafted speaks of "persons carrying on any school", and it was suggested that this could be interpreted as meaning that the school must have become fully established, premises obtained, staff recruited, students actually in attendance and so on before any grant could be paid. When the Cinematograph Films Council considered this matter and made their recommendation, with which the Government later agreed, they recommended that the running costs of the National Film School should be met only partly from the levy. Running costs, of course, will begin to be incurred before students arrive. Rent of premises and the salaries of staff who must be recruited in advance are examples of this. The Amendment will allow a contribution towards those running costs to be made. But, again, I should like to make clear that the grant will be limited to running costs. Capital costs will be met from other sources. Those who are making the arrangements for setting up the school are aware of this, and accept it.

I should like to mention also a third point, one to which the noble Lord, Lord Strabolgi, referred during the Second Reading debate. In making their recommendation about financial support for the National Film School the Cinematograph Films Council said that they considered that it would be wrong for the annual cost of a National Film School to be met entirely out of the British Film Fund. They took the view that the British Broadcasting Corporation and the Independent Television companies, who would employ graduates from the school, should also contribute to its annual cost. That seems to me to be a reasonable view. I ask your Lordships to accept the Amendment. I beg to move.

LORD DRUMALBYN

I rather expected that we should have a little more comment on this particular Amendment than we have had, and that the noble Lord, Lord Strabolgi, would move his Amendments before we disposed of these Amendments.

LORD STRABOLGI

It may be for the convenience of the Committee if I speak on my Amendment now, when the noble Baroness calls it.

LORD DRUMALBYN

We are dealing with Amendment No. 2 at the moment, and I thought that perhaps it would be convenient for the noble Lord to do this. I think that the arrangements that the noble Baroness, Lady Phillips, has suggested are ample, and I want to make only two comments. The first is—and I am in the difficulty here that it covers a comment that is implicit in Lord Strabolgi's second Amendment—

BARONESS PHILLIPS

It may be convenient to the Committee if we agree Amendment No. 1, and I then move Amendment No. 2. This will simplify the matter.

4.40 p.m.

BARONESS PHILLIPS

I beg to move Amendment No. 2.

Amendment moved—

Page 4, line 1, leave out paragraph (d) and insert— (" (d) with the approval of the Board of Trade, payments to not more than one body incorporated after the passing of the Films Act 1970 and for the time being approved for the purposes of this paragraph by the Secretary of State, being a body having among its objects the carrying on of a school in Great Britain for the training of persons employed or to be employed in the making of films.")—(Baroness Phillips.)

LORD STRABOLGI moved Amendment No. 3, as an Amendment to No. 2: Line 2, leave out ("to") and insert ("to-wards the costs to be incurred by")

The noble Lord said: The procedure now is, I think, that the mover of the Amendment to amend the Government Amendment is called to speak. I suggest that it is for the convenience of the Committee that we take my Amendments Nos. 3 and 5 together. I am rather heartened by what my noble friend Lady Phillips said about these consultations, and I am therefore encouraged to hope that she will include my wording in the Bill. The first purpose of these Amendments is to ensure that the National Film School is not financed entirely out of the Eady levy. The wording of my noble friend's Amendment refers to "payments to not more than one body", and in my Amendment I suggest "payments to-wards the costs to be incurred by not more than one body".

The second purpose of the Amendments, which is dealt with by my Amendment No. 5, is to bring in the television authorities, both the B.B.C. and the I.T.V., as I think it is clear—and indeed it has been recognised by my noble friend this afternoon—that television will derive considerable benefit, to an increasing degree, from a film school of this kind. Another beneficiary will be the advertising industry, but I have not included this because I think that television commercials will already be contributing in-directly through the very high television levy (I am glad to see that it has recently been reduced, but in my opinion it is still far too high) if the Government can find some way of siphoning off part of this levy towards helping to finance a Film School.

"The Lloyd Report when dealing with the question of the capital and the financing of the School said quite clearly that the capital costs should rest firmly on the State; and I am sure that everybody will agree with this. It is when we come to the question of the running costs that there is controversy. Not all the members of the Lloyd Committee agreed that all the running costs should come from the Eady levy. Some believed that only part should come from this fund, the balance being provided from public funds. We have not so far had an answer from the Government as to why this School is to be treated differently from other schools which are largely financed from public funds.

The main trade associations do not support the use of the Eady Levy to be the sole financers of this School. Initially, the Film Production Association sup-ported it, provided that the payment was a fixed sum. But last year the Association withdrew their support after hearing representations from the Cinematograph Exhibitors' Association and the Kine-matograph Renters' Society. The money collected under the British Film Fund arrangements is industry money contributed under a voluntary agreement. The British Film Fund agency really fulfills the role of a trustee, and I submit that they should not be empowered by an Act of Parliament to go against their own obligations and to make payments for purposes not originally approved. I think that there is an important matter of principle involved here.

A further objection is that the Eady money is based on the box office receipts, and therefore the more successful a film is, the more it will pay towards the School, while the less successful a film is, the less it will pay; and some films will pay nothing at all. This is quite different from levies made under the Industrial Training Act, which are based on the number of employees in the particular company. The Cinematograph Films Council, as my noble friend has aid, considered that it would be quite wrong for the annual cost to be met entirely out of the British Film Fund. They went further and said that they thought that the B.B.C. and Independent Television, who would employ graduates of the School, should also contribute to its annual cost. They went on to say that they recommended the running costs should be met only partly from the levy.

I should further like to emphasise that the Lloyd Committee (and I am sorry that my noble friend Lord Lloyd of Hamp-stead cannot be here to-day) were strongly in favour of teaching films at the School, teaching films for television, as part of the schools curriculum. The Committee were supported in this by the B.B.C. The Report says that the B.B.C., in its evidence, indicated that in its view the Corporation would benefit if there were in existence a National Film School which could provide training of the kind suitable for its programme needs. I am sure that that view is shared by the I.T.A.

I am further encouraged in the hope that these Amendments will be accepted because in the other place the Parliamentary Secretary to the Board of Trade, during the second sitting of the Committee, said that it might well be that the matter of using part of the television levy should be looked at. She pointed out that this was the responsibility of the Ministry of Posts and Telecommunications and not of the Board of Trade. She implied that this was one aspect of the National Film School which could well be considered by a number of Ministries. Therefore I think the Government themselves have made out a very good case for financing this School only partly from the Eady levy, which is drawn from the cinema exhibitor, and for financing it in other parts from such bodies as the television authorities who are equal beneficiaries of a School of this kind. I beg to move the Amendment to the Amendment.

LORD DRUMALBYN

I am grateful to the noble Lord for having expressed the views that he has done. It seems that the first question to be settled here is, who is to finance the School. If part of the money is to come from the British Film Fund, who else should contribute? How is this to be secured? If it is to be the B.B.C. and the I.T.A., are the arrangements, which the noble Baroness has suggested, sufficient to ensure that they will contribute? If the I.T.A. are to contribute, is it reasonable that they should contribute out of the revenue after the levy has been taken from them, or should the contribution come from the levy? Finally, should the State also con-tribute, whether or not the B.B.C. and the I.T.A. do?

So far as the contribution from the British Film Fund is concerned, I considered putting down an Amendment to secure that the contribution should not exceed a specified proportion of the levy, taken together with the contribution that is to be made to the British Film Institute, under paragraph (c), towards the cost of making films. I had a talk with the noble Baroness about this matter and she convinced me that it was better to retain flexibility, as is done without any difficulty in the case of the contribution towards children's films. Perhaps the noble Baroness will be able to give us further information about the general running cost that is expected to be incurred. I understood from what the noble Lord, Lord Lloyd, said in the course of his remarks that it was some-thing of the order of £150,000 a year. That sum, if it were borne entirely by the levy, would represent a considerable proportion of the total levy, which may be expected to run, I suppose, up to £4 million. It is running at about that sum at the present time.

If contributions are to be made to the British Film Institute as well as to the Children's Film Foundation (which is also a substantial proportion of the levy: about 5 per cent. or something of that order), the levy begins to look a bit wan. There is therefore a good deal to be said for specifying a maximum proportion of the levy as the amount of the contribution that may be required. I would deprecate setting out in the Bill a fixed sum, because that would be altogether too restrictive. It would be very much better to make provision for changes in costs, and possibly a rise in the levy, too, as time goes on. One has also to contemplate the possibility that the amount of the levy will fall, through a decline in cinema attendances, yet it may still be desirable to envisage an expansion of the School because the films could be used in other ways in the future.

There are a great many variables to be considered here. I am in favour of having a flexible solution, but we should like the noble Baroness to spell out a little more than she has done how she envisages the kind of proportions as between the various possible contributors, and how she is going to ensure that those will be made.

4.46 p.m.

BARONESS PHILLIPS

I must say at once to the noble Lord, Lord Drumalbyn, that I am afraid I am not able to give him the proportions that he has asked for. The noble Lord, Lord Strabolgi, rightly said that the Cinematographic Films Council have stated that they consider that the B.B.C. and independent television companies should also contribute. This recommendation will be borne in mind when the Board of Trade consider any grants from the Fund for the benefit of the National Film School. There is an obligation on the Department to consult in respect of any giants that are made. I was not quite sure of the intention of Lord Strabolgi's Amendment. Now I see what he has in mind, and I wonder whether he will allow me to look at this point again, although I cannot hold out any promise that the Government can go very much further than we indicated on Second Reading. One merely hopes that by reiterating this point, and stating it very forcibly for the record, the interests concerned will recognise their obligations in this connection.

So far as public monies are concerned, the Department of Education and Science will be making a very heavy contribution towards the capital costs of the Film School. It seems only fair that the industry which will ultimately benefit should also make some contribution. I take the point of the noble Lord, Lord Drumalbyn, that the percentages will be very important because of the total cost of the levy. I am sorry that I am not able to give him the precise figures. We can return to this point again on Report stage if the noble Lord, Lord Strabolgi, is willing. On the noble Lord's second Amendment, in which he asks for consultation with the B.B.C. and the In-dependent Television Authority, I assume that he is hoping that the consultation will involve them more.

I must explain that the Government Amendment imposes on the Board of Trade the duty to consult the Cinematograph Films Council, but only in relation to the School. It is a statutory body, one of whose functions is to advise the Board of Trade on any matter on which the advice of the Council is sought by the Board. It is entirely appropriate that the Board should consult the Council and, indeed, it is required to consult the Council before approving a grant. There is no parallel situation as regards the British Broadcasting Corporation or the Independent Television Authority. Any consultation with these two bodies would fall within the province of my right honourable friend the Secretary of State for Education and Science.

In another place my honourable friend the Parliamentary Secretary to the Board of Trade referred to the view expressed by the Cinematograph Films Council that the B.B.C. and independent television companies should also contribute to the annual costs, and I have repeated this. I think this is a reasonable view to take, but because, as I have explained, the Council is a body set up expressly to advise the Board of Trade on film matters (whereas the others are in quite different positions) I am afraid that I am unable to accept this Amendment, and I shall have to ask the noble Lord, Lord Strabolgi, whether he is willing to withdraw it.

LORD STRABOLGI

I am grateful to the noble Lord, Lord Drumalbyn, for his support; and also to my noble friend for her reply. In view of her under-taking to have another look at my Amendment No. 3 on Report stage, I will of course withdraw it. I am most grateful to her for undertaking to go into this matter further, and I look for-ward to hearing what she has to say between now and the next stage of the Bill. With regard to the other Amendment, No. 5, I intend not to move that. I may say that I put it down mainly for discussion. I realise that for the Board of Trade to put into a statutory measure that they shall consult with bodies which come under another Department would create difficulties, but I wanted merely to establish a principle. I do not think that just because the Eady levy is there and is convenient, it is a reason for taking it. The Government must go a little further than this and find how to finance this school properly, and then do it. But I am most grateful to my noble friend, and I beg leave to withdraw the Amendment.

Amendment to the Amendment, by leave, withdrawn.

BARONESS PHILLIPS

I beg to move Amendment No. 4.

Amendment moved—

Page 4. line 6, at end insert— (" () The following shall be added at the end of section 1 of the Cinematograph Films Act 1957— (5) Before giving their approval to a payment under paragraph (b), (c) or (d) of subsection (1) of this section the Board of Trade shall consult with the Cinematograph Films Council ".")—(Baroness Phillips.)

LORD DRUMALBYN

There is a small, almost finicking, point here, but I should like to satisfy myself that what is proposed is right. As the Amendment is drafted, taken quite literally it would require the Government—the Board of Trade—to consult with the Cinematograph Films Council before giving their approval to a payment, but it would not require them to consult before withholding their approval to a payment. I do not know whether this was intended and deliberate, but it seems, all the same, that it is something that ought to be looked into if the Government are not quite sure that they have said what they meant.

BARONESS PHILLIPS

I take the point made by the noble Lord, Lord Drumalbyn. He is an expert at combing Bills and I assure him that we will look at this point, because obviously there seems to be some anomaly here. I should certainly think, subject to correction, that the Government would consult on either occasion. May I look at the point further?

LORD ARCHIBALD

I object in principle to this further raiding of the levy for the purposes of helping to finance the running costs of the Film School, but I am not going to pursue that point to-day. I would point out, however, that, so far as payment from the levy towards children's films is concerned, it was done with the unanimous approval of the main trade associations, and not just after consultation with the Cinematograph Films Council. I would ask my noble friend whether she would consider between now and Report stage adding to Amendment No. 4 the words: "and with the main trade associations". I think that the Board of Trade should not only consult the Cinematograph Films Council but also consult the main trade associations. That is nothing in the way of new procedure. It is common practice for the Board of Trade to consult main trade associations, as they did, for example, before this Bill was even drafted. It would only be fair to the industry, which is providing the money, that the industry itself should be consulted before the decisions are made.

BARONESS PHILLIPS

The noble Lord will appreciate that I can give him no undertaking. While I know his great expertise in this industry, I would merely say, with all humility, that it seems to me that the Cinematograph Films Council is surely the representative body of the industry. But I will look at this point for him and return to it at Report stage.

4.54 p.m.

LORD WILLIS moved Amendment No. 5A:

Page 4, line 6, at end insert— ("() after the payments provided for in (b), (c) and (d) above, a total of one-sixth of the income from the levy shall be set aside for distribution to the producers of those British films which, while adjudged to be of outstanding quality, have not earned their production costs back at the box office. Such payments shall be made on the advice of a panel composed of members of the Film Producers' Association, the trade unions, and the distribution and exhibition associations, meeting under an independent chairman, and with the approval of the Board of Trade.")

The noble Lord said: This Amendment, since it has to do with the distribution of the levy, the Film Fund, may seem at first sight to be rather an idealistic kind of Amendment, one that goes against hard-grained commercial principle, but I hope your Lordships may be convinced that it attempts to get the Fund back on to the proper rails, back to its original intention, and that in fact the suggestion which is contained in this Amendment is a highly worthwhile commercial one. I would remind your Lord-ships that the original intention of the British Film Fund, known as the levy, was to assist British production; to put money back into British films. It is a strange thing that in the situation of the film industry we had to have a law —it was voluntary at first; it was then made statutory—to enforce the redistribution of the film industry's income. So money had to be taken out of one pocket and made available to another section— put back into production. Personally, I think it is a pity that the industry should be so organised that that is necessary. But it is necessary; and it is clearly necessary that it should be continued, as this Bill makes it continue at least until 1980.

But, given that, what experience have we of the operation and working of the levy since it was introduced on a voluntary basis and later operated on a statutory basis? We have absolutely over-whelming evidence that it is a distribution which is heavily biased in favour of the big commercial successes; that it puts hot chocolate sauce on the already existing ice cream. Films that make the big profits get the lion's share of the Fund— films that may not need it so much get the vast majority of the money—while films which are equally entertaining, and may be even more worth while in terms of real worth, can end up with little or nothing. One practical example is the James Bond films, which I think are highly entertaining and very good films, good for the industry. All those make huge profits. The film Goldfinger, I believe, made a profit well over the £1 million mark. But, in addition, it was given a bonus of well over half a million pounds from the levy, on the ground that it had attracted vast audiences up and down the country. So success had further success, as it were, piled upon it; whereas a film such as Oh, What a Lovely War!, which has received universal acclaim everywhere and tremendous notices from the critics, which has done an enormous amount for the prestige of this country and the film-makers of this country, and which to a certain extent broke new ground, has not had the same success in commercial terms and will end up with very little from the Fund.

This is not equal treatment. It is rather like giving a millionaire extra family allowances on the ground that he has been tremendously successful, much more successful than (shall we say?) a layman. The objection to the suggestion contained in this Amendment is: Will this not be a way of subsidising failures? We have to say, frankly, "To a certain extent, yes". But what do you call a failure? Do you call Oh, What a Lovely War! a failure in relation to the James Bond films or the "Carry On" films? I admit that we are here entering an area in which we have to make value judgments, and we are dealing with some-thing which is not only an industry but also an art form, and which has important connotations so far as art is concerned.

Therefore, in my view, it is right that in certain instances some films; should be helped, for some of to-day's failures are quite clearly the pathfinders; for to-morrow's successes. Film is not only entertainment, and there can be no certainty of success. We already follow this principle in theatre, opera and ballet. I doubt whether there is anybody who could afford to buy seats at Covent Garden at normal commercial prices. The Opera House is subsidised heavily, and if it had to operate commercially it would be a failure; but there would be a great outcry in this country if somebody said, "The ballet is a failure, and therefore we should not subsidise it." I am not suggesting a subsidy in this instance; I am suggesting that what was originally intended as a redistribution of a portion of the income from the film industry should be slightly altered so that it has a fairer spread, and so that one does not add profit to profit, and that those films which are highly successful, and therefore do not need the assistance of the levy, can afford to give up a little of the levy to those films which are not quite so successful.

It is a modest proposal, as I shall show, that I am putting forward. Let us assume, as has already been indicated in this debate, that the levy runs at £4 million a year: it may be less this year, it may be more next. Under this scheme we should reserve a sum of about £633,000 for distribution to other British films. It would still leave well over £3 million for the Goldfingers and the "Carry Ons"—and that is not bad "gravy" in anybody's language. How would one judge? No-one is infallible, and I do not suggest that the advisory panel that I have proposed in the Amendment is necessarily the right way to do it. I have suggested a Ministry Committee under an independent chairman. Its terms of reference could be worked out so that the money would go only to genuinely creative film-makers and not to fly-by-nights.

This system works well in some of the countries on the Continent. In West Germany, for example, there is a similar fund which gives bonuses, as it were, to successful short films. It is possible for the creator of a successful short film in West Germany to apply to a committee, and he may receive a bonus equivalent to £2,000 for his film if it is considered to be worth while, because it is seen quite clearly in West Germany that short films have a value to the industry but may not necessarily be completely commercially viable, and there is a stipulation that the money must go back into production. It may be that we could work out some-thing similar in this country.

I hope that this Amendment will com-mend itself to the Committee. It has support from some distinguished film-makers in this country—people who, in a sense, stand to lose, because they are people who make the big commercial films. But I have talked to some of them, and there is a feeling that there is something in this sort of Amendment. It would give much-needed encouragement, it would be devised in such a way that it kept out the "pirates"—the people who come in to make the cheap "quickies". It could be devised on the basis of value judgment by a properly constituted body, and it is a way in which this industry can invest in the future. We ought to be prepared to support the worthwhile work in the cinema which perhaps does not enjoy the enormous commercial success of some other subjects.

I know, too, that there is an argument that this money is a levy on the film industry's money and that it is being carved up quite enough as it is. This is not a suggestion for carving it up: this is a suggestion that it should follow its original principle and should be distributed to producers, but on a slightly different basis from that used in the past. I object to the feeling that sometimes exists that, because this money is collected at cinemas, on the basis of a small levy from exhibitors, it is the exhibitors' money. In my view it is not; it is the industry's money, and this is something to help the industry to develop. I beg to move.

LORD HAWKE

Before the noble Lord sits down could he enlighten us as to how the present "carve-up" is con-ducted? It would help us to follow his argument.

LORD WILLIS

The present levy is collected on the basis of a small levy on each seat sold in the cinema. The box office returns for each particular film are analysed and on the basis of the number of seats sold and the receipts at the box office the producer of the film gets a share of the levy in proportion to the takings at the box office. Therefore, if one takes £1 million at the box office one will get £100,000 out of the levy fund; if one takes £2 million at the box office one will get £200,000 from the levy fund.

5.6 p.m.

LORD STRABOLGI

I hope that the Committee will not accept this Amendment. I have listened with great interest to the way in which my noble friend has moved it, and I think he has moved it most ably. I think that probably there is a case for subsidising films of minority interest, and artistic films. I absolutely agree with my noble friend that there is a case, but I do not think they should be subsidised by the cinema industry. Films of this kind should be subsidised by public funds—Government funds or local authority funds—but not by the cinema exhibitors because, as my noble friend said, the Eady levy is based on the number of seats sold for a particular film. The more successful a film is, the more of this levy goes back to the company who made it, to encourage them to make other films and to employ more people in the industry and to give pleasure to audiences throughout the world.

If we are going to say that some of this levy should be taken and given to the weaker brethren we are immediately putting a penalty on success and starting to subsidise failure. I think we would be encouraging people to make films without having an eye as to whether they will be viable economically; and I know of no precedent in any other art, in book publishing, in art galleries or anything else, where the stronger sections are made to subsidise the weaker. A further complication with the film industry, as al-ways, is that a film is a very expensive product indeed.

Therefore, while I think there is much to be said for subsidising specialised films, it would be wholly wrong and quite un-fair to ask the cinema exhibitors to do so. Furthermore, I do not know what foreign investors who come to this country to make films on the co-production basis would say about this. I do not know what our American friends and colleagues would say if they came to make films on the co-production basis and the more successful the film was the more money they would have to pay towards the "duds". I am afraid this is good in theory but that it will not work out in practice.

Also, as I thought my noble friend was prepared to concede, it is going to be difficult to judge what is "outstanding quality". I do not know. I think the main yardstick is really the product that appeals to the greatest number of people over the longest possible time. I sup-pose the supreme example of that is Shakespeare. I know of no other yard-stick: it cannot be done by a committee —in my view that would be absolutely impossible. This is a subjective matter, and for all those reasons I hope that the Amendment will not be accepted.

LORD LEATHERLAND

May I bring a note of independence into this debate? My two noble friends are both involved in the film industry in one way or an-other. I am not. I am not a film writer, and never have been; I am not a starlet or a "sex kitten" or anything of that kind. I am completely independent, and my only interest in the film industry is that occasionally I go to the cinema. I feel that a matter of great importance to the industry, and therefore to the people who view the films that we make in this country, is that we should cultivate very carefully the next generation of film makers and film artists, and unless we give some encouragement to the younger generation—and I speak of the young in heart, not merely those young in years— to experiment with new types of art form, then we might find that when the James Bonds and the nudist films have played themselves out we shall have nothing at all to take their place. I feel that if new film artists and directors are to experiment with new art forms they must be insured in some way, not against reckless-ness but against failure which attends upon the genuine efforts which they make. Therefore, I sincerely hope that this Amendment will be carried.

Having said that, I should like to find fault with one particular passage in the Amendment; that is the one which sets up as the judges—to determine who shall get grants and who shall not—the representatives from the Film Producers' Association and the trade unions in the industry, with an independent chairman. I feel this is too narrow a basis of representation. I have a feeling that if those two vested interests were to be the sole judges we might have a plethora of nudist films, films dealing with what we in our gentlemanly way would call un-desirable topics, something of the avant garde type, not really in the interests of the general bulk of cinema attenders in this country. I should like the genuine art and not the phoney art which is some-times thrust down our throats and before our eyes. I should like to see in addition to those vested interests, which have a smack of syndicalism about them, representatives of the general public, the film-going public, sitting on this judgment board. If my noble friend Lord Willis could find it possible to expand the membership of the Board in this way, I should be very pleased to vote in favour of the Amendment, something I shall do in any case in the hope that he will meet me on this point.

LORD DRUMALBYN

May I take up where the noble Lord has left off? The last report of the Cinematograph Film Council said this: It appears to us that the British Film Fund is an important inducement to film production. That is the point of the British Film Fund; it is designed to encourage the making of British films, the use of British talent and British resources, and it does not mind very much where the money comes from to make the films. The point is to make films in Britain with British resources and British talent. There is, I would say, no a priori reason why the levy should not be divided both in the way that the box office determines and also on merit. The noble Lord, Lord Leatherland, said that he would support this Amendment because it envisages that some attention should be paid to merit apart from the box office, if I understood him correctly. Then, of course, he quarrels with the noble Lord's suggestion as to who should decide that merit. This is the hub of the whole question. It would, I am sure, be a good idea to give merit awards, although I would say in passing to the noble Lord, Lord Willis, that the mere fact that they are given in Germany would not necessarily mean that they should be made out of the levy for the British Film Fund. One could envisage a separate way of giving the awards, but when you are considering how to distribute the British Film Fund you have to take into account different considerations.

If you had a separate fund with various interests subscribing and them- selves electing the panel, that would be one thing. But if you merely say, as the noble Lord has said, that there should be merit awards made on the advice of a panel composed of members of the Film Producers' Association, the trade unions and the distribution and exhibition associations, I do not see how this would necessarily commend itself to the public; nor would it commend itself necessarily to the industry in the broader sense. If one could solve this question as to merit awards on purely technical merit, apart altogether from the box office considerations, on merit from the point of view of imagination and production, then perhaps there would be something to be said for doing this, although I still do not think it should come out of the British Film Fund. First of all, we have to consider what the fund is for; and secondly how we decide on merit and by what criteria. There may be a germ of an idea in the noble Lord's Amendment, but as it is at the moment I am bound to say that I could not support it.

5.17 p.m.

BARONESS PHILLIPS

My Lords, we have had a very interesting debate on this Amendment, and there is little that I would add from the Government's point of view. I think I must reiterate what the noble Lord, Lord Drumalbyn has just said: that in this piece of legislation, we are of course concerned with the commercial aspect of the industry. The encouragement of films as an art form is part of the Government's policy of assistance to the arts generally, and I think this Government have every reason to be proud of the contribution they have made to the arts. It is very important to keep these two forms of assistance distinct, but they do not conflict; and they can and do complement each other. It seemed to me that the noble Lord, Lord Willis, suggested that there is always a conflict between commercial success and high quality. But perhaps he would agree that sometimes they do go together. Indeed, I think—and I am a great cinema-goer—that more and more this is the case.

We have to bear in mind that the adoption of the principle underlying this Amendment would mean (this point has been made, I think, even by Lord Willis himself) that the successful would be sub-sidising the less successful. The Government recognise that there is a case for subsidy of the arts, but in this Bill we are concerned with film-making as a commercial enterprise, and it seems very clear to me, as it has done to several other noble Lords, that any scheme of quality awards would from its very nature be in-appropriate in the present Bill: it would be subjective. I was interested when visiting another county last week to discover that they had refused to show a certain film which they said would corrupt public morals. When I suggested that this was a purely subjective judgment they did not agree. But what is good for one may be bad for another. I am afraid that I cannot accept this particular Amendment in this Bill.

LORD WILLIS

I am grateful for the sympathy at least, that has been expressed in different parts of the Committee. The most surprising statement, I thought, came from my noble friend Lord Leatherland, when he said that he was not a sex symbol. He could have fooled me! May I come back to the point, which seems to me to be highly illogical in the extreme, made by my noble friend Lady Phillips and the noble Lords, Lord Drumalbyn and Lord Strabolgi, about subsidising. The whole levy is a subsidy. It is a subsidy, taken out of one pocket of the industry and given to the producers, in the form of a tax on seats. How else would British production have been kept going, and overseas production attracted, if that money had not been available? But it had to be produced, first of all, as I said, on a voluntary basis, and then on a statutory basis. It was there to help production. Mine is a simple suggestion about a slightly different apportionment.

If in moving the Amendment I used the words "art form" I hope I did not mislead the Committee, because I do not necessarily disagree with my noble friend Lady Phillips, that art and entertainment are not two separate entities; that often they go well together. But it is clearly wrong—and I think that nobody could hesitate to make a value judgment here —if you have a certain amount of money which is to be used to encourage British production and you have two members of the family, that one should get it all because he is big and strong and successful, and the other should get nothing, although he has had a good try; that Goldfinger, for instance, should make an enormous sum of money out of the levy and Oh, What a Lovely War! should make nothing. That is the essence of the argument I am making.

There are all these fears that this would drive away overseas producers, and so on. But I am suggesting a quite small amount, one-sixth. Out of a total figure of £4 million, £3 million or more would be left in the kitty for overseas producers, for the producers of the successful pictures and so on. Would it be a subsidy from the successful to the less successful? No, because we fixed the figure, and the way it should be distributed, some years ago. I believe that we were wrong in the way we did it, and that it now needs adjusting. It is not their money that we are taking away from them. We are saying, "You have had so much all these years; now you can have a little less of our money. We are going to distribute it in certain other directions."

The other point made was that it would be impossible to have a panel of the kind I have suggested that would make a value judgment. Why? We have panels of this kind operating all the time with the Arts Council, and other bodies. It seems to me that it should not be beyond the wit of the Government, and of Parliament, to devise some form of panel, not necessarily exactly in the way I have indicated, but, if you like, completely independent, which could make this kind of value judgment on the basis of an application made. I think that this suggestion for an amendment of the Bill and of the way in which the Fund operates is of great importance. I recognise that perhaps at this moment it has; not the complete sympathy of the Committee. I am sorry that my noble friend Lord Strabolgi, with whom I agree on so many other things, disagrees with me on this. But I am perfectly sure that it will not be long before he comes around to this point of view, as I am sure the industry will. At this stage, therefore, I shall not press the Amendment; but I hope that the Government will take note of the points and that it may be possible at a later date to introduce some way, such as I have suggested, of amending the form of distribution of the levy. In other words, I remain unrepentant, but I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 6, as amended, agreed to.

Clauses 7 to 14 agreed to.

5.26 p.m.

LORD WILLIS moved Amendment No. 6:

After Clause 14, insert the following new clause:

Applicant for registration of film to give certain statutory undertaking

".Section 9 of the Films Act 1960 shall be amended by adding at the end the words: — '(8) The applicant for the registration of a film shall at the same time as he makes an application under this section furnish to the Board of Trade a statutory undertaking to the effect that he has either given or offered or offered to sell at cost price to the National Film Archive of the British Film Institute a positive print of the film.'

The noble Lord said: It may be for the convenience of the Committee if with this Amendment we discuss the later Amendment in the name of the noble Lord, Lord Amulree. This is a simple Amendment upon which I shall not spend a great deal of time. The only difference between my Amendment and the later Amendment is that the word "offered" appears twice in my Amendment, which reads: … a statutory undertaking to the effect that he has either given or offered or offered to sell…

The reason why I put in the extra "offered" is that the National Film Archive may not want the film, but there is a statutory obligation that at least it has to be offered. It may be that it is the type of film that they do not think is worthy of inclusion in the Archive. Once again we come into the area of value judgment because the storage space is so sparse. But I think that enough was said on Second Reading to indicate the great importance of the National Film Archive. It is tremendously important that we build it up, and I think that this simple Amendment ought to commend itself to the Committee. It does not put a great expense on the industry; it finds a way of keeping alive a full record of what is being done in British film-making. I beg to move.

LORD AMULREE

I should like to support this Amendment which covers much of the ground of my Amendment. I should like to speak to this Amendment now, and possibly not talk on my own Amendment when it is called. I think it is extremely important to keep old films, both from the point of view of keeping a record of the film industry in the past, and of the research which can be done on them at the present moment and in the years to come. Copies of books have been kept since the reign of Queen Anne in 1709, but no similar pro-vision has been made for films.

The National Film Archive does not need to preserve for posterity all films. I think it realises that films are expensive things and it would be a trouble to get them all. But it would like to preserve some in the best possible tradition, which indeed it can do now with its present storage system. At the same time, the Archive would like to make the films available to those who wish to study them now. This is not always easy to do. As the noble Lord, Lord Willis, has said, they do not want to make it compulsory, but they wish to be selective. They have no statutory powers at all to do that.

The selection does not really work well. I have some figures from the British Film Institute. In the past ten years 3,292 films were shown in Great Britain, of which 849 were selected for the Archive, but are not in the Archive now because they could take only 227. This is one-quarter of what they chose; it is one-quarter of the total. So the number which they get is extremely small. The Independent Television Authority is making a gesture in the sense of giving the Archive a grant for the purchase of films shown on I.T.V. The B.B.C. could not do this because of their different financial structure, a matter which I do not want to go into just now.

Another danger is that it is always possible under the present voluntary system for an owner to take a film from the Film Archive. Although this is not very likely to occur, it is something that might well occur. This could be avoided if it were made statutory for the films to be offered to the Archive, which could buy what it requires. In that way they would be equipped with Parliamentary sanction, and they would not be in any danger of losing the film.

One can see two difficulties in the way of this Amendment which may not apply so much to the noble Lord's Amendment as to my own. The Bill is one for the encouragement of the film industry. One wonders whether the thought of immortality might not give encouragement to the making of more films. If people thought that they were going to be kept and preserved, some encouragement might be generated. Secondly, I do not know what difference of opinion there might be between the Board of Trade and the Department of Education and Science. They are different Departments, but I imagine that they can solve their differences quite easily. I should like very much to support the Amendment moved by Lord Willis, and I trust that I shall not be called upon to move my own Amendments when they come to be called.

LORD FARINGDON

I should like to come to the support of my noble friends in this matter. I am confirmed in so doing by my recollection of the decision of Parliament that all plays should be preserved and kept, and I see no reason why the same compulsion should not be extended to films. I sincerely hope that Her Majesty's Government will agree to this Amendment and will give to the preservation of films the importance which they attach to the preservation of plays.

BARONESS PHILLIPS

I think that those noble Lords who have spoken, including the movers of the Amendments, have, in a sense, anticipated what I am going to say. These three new clauses —and, with permission, I am speaking now to Amendments Nos. 6, 10 and 11 all relate to the National Film Archive, which is run by the British Film Institute, whose activities are concerned with the cultural and non-commercial aspect of film-making. The legislation for which the Board of Trade is responsible, including the present Bill, governs film-making, distribution and exhibition as a commercial business. The British Film Institute, as the noble Lord has already indicated, receive their grant from the Department of Education and Science, and the present legislation is not an appropriate place for provisions of this kind.

That is not to say that I do not sympathise entirely with the objectives of the Archive. On the contrary, I personally (as, I know, do Her Majesty's Govern-ment) appreciate its importance and value. But there is a distinction—as we discussed in the previous Amendments— between support for film-making as an industry, which is what we are concerned with here, and support for film-making as an art and as a valuable social record. The absence in this Bill of any provisions which have any relation to the artistic and cultural aspect of film-making is not to be taken as evidence that the Government are not very conscious of the great value of this, or indeed are neglecting it in any way. On the contrary, the annual grant to the British Film Institute has increased about fourfold over the last five years, and of course the Film Archive has benefited from this. But these matters cannot be considered within the con-text of this particular Bill, and I would accordingly ask the Committee to reject these new clauses. As to the new Clause 10, I should perhaps add that an exhibitor is, in the normal course, licensed to show a film in a particular cinema, and he does not own the print of the film which he uses for exhibition. Therefore, it would not be possible to impose on him an obligation to give or sell the film to the Archive or to anyone, else.

LORD STRABOLGI

May I say how very disappointed I am with my noble friend's reply. I warmly support what all other noble Lords have said. I think my noble friend Lady Phillips confused the subject by speaking of films as an art form and films which are commercial and are dealt with in this Bill. The National Film Archive is to deal with all films, whether they are commercial, art films, or anything else; it is to be an archive of all films. I have felt for some time that this very important Archive is really the Cinderella of the Arts. Enormous sums are poured into Covent Garden, the museums, the galleries, the theatres—some noble Lords may think not enough—but the sums which are given to the National Film Archive are absolutely pathetic. As my noble friend said, they are routed through the British Film Institute, which gets, I think, £350,000, and the Archive gets about £70,000 a year, which is absolutely ludicrous. As I said on Second Reading, the Archive is, in many ways, just as important as the British Museum Library, and in the future, when students wish to study the whole of our civilisation, they will go just as much to the Archive as to the Library.

The film as an art is just as important as an opera, just as important as a ballet, just as important as a book or painting; yet it is treated as a Cinderella. I realise that probably there is not a place in this particular Bill for an Amendment of this kind, but I hope the Government will begin to realise how important and vital this Archive is, so that films can be preserved there before they perish —preserved not only for reference and for study now but for the future—and that some sum commensurate with its importance will begin to be granted to it by the Exchequer. I warmly support the Amendment of my noble friend.

Resolved in the affirmative, and Amendment agreed to accordingly.

5.46 p.m.

LORD WILLIS moved Amendment No. 7:

After Clause 14, insert the following new clause:

LORD WILLIS

I have very little to add to what my noble friend Lord Strabolgi has said. I think it is wrong to confuse the argument by talking about art films and entertainment films, and saying that this Bill is a Bill which deals with commercial films. As my noble friend has said, we are talking about an Archive which will reflect the whole of film-making and, through reflecting the whole of film-making, will reflect our age and our time. Like him, I am disappointed in the rather negative reply from the noble Baroness. I know it is not her fault, but I regret that in the circumstances I feel we ought to press the Amendment, because it is of such great importance.

5.41 p.m.

On Question, Whether the said Amendment (No. 6) shall be agreed to?

Their Lordships divided: Contents, 59; Not-Contents, 20.

CONTENTS
Albemarle, E	E.Dundee, E.	Moyle, L.
Alexander of Tunis, E.	Elliot of Harwood, Bs.	Nunburnholme, L.
Amulree, L.[Teller.]	Emmet of Amberley, Bs.	Poltimore, L.
Archibald, L.	Faringdon, L.	Raglan, L.
Atholl, D.	Foot, L.	Rankeillour, L.
Auckland, L.	Gridley, L.	Ritchie-Calder, L.
Audley, Bs.	Grimston of Westbury, L.	St. Aldwyn, E.
Bernstein, L.	Headfort, M.	St. Oswald, L.
Birdwood, L.	Henley, L.	Sandford, L.
Blyton, L.	Ilford, L.	Sempill, Ly.
Braye, L.	Inglewood, L.	Stonehaven, V.
Brockway, L.	Jellicoe, E.	Strange of Knokin, Bs.
Brooke of Cumnor, L.	Kilbracken, L.	Taylor of Mansfield, L.
Burton, L.	Lauderdale, L.	Thurlow, L.
Byers, L.	Maelor, L.	Vivian, L.
Carrington, L.	Mancroft, L.	Wade, L.
Chorley, L.	Merrivale, L.	Willis, L.[Teller.]
Daventry, V.	Molson, L.	Windlesham, L.
Denham, L.	Mountevens, L.	Wynne-Jones, L.
Drumalbyn, L.	Mowbray and Stourton, L.

NOT-CONTENTS
Ardwick, L.	Falkland, V.	Phillips, Bs.
Beswick, L.	Gardiner, L.(L. Chancellor.)	Rusholme, L.
Bowles, L.[Teller.]	Henderson, L.	St. Davids, V.
Brown, L.	Hilton of Upton, L.[Teller.]	Serota, Bs.
Burden, L.	Hughes, L.	Stocks, Bs.
Champion, L.	Leatherland, L.	Wright of Ashton under Lyne, L.
Delacourt-Smith, L.	Lindgren, L.

Amendment of section 17 of the Films Act1960

".In section 17(2) of the Films Act 1960 (definition of status of films made in Eire and the British Commonwealth) there shall be inserted the following paragraph:— '(d) that the government concerned shall have entered into reciprocal arrangements with the United Kingdom Government.'

The noble Lord said: Again, this Amendment is a small but rather important one, because it takes note of changing circumstances in the film industry. It proposes that there should now be introduced a distinction between films made in Commonwealth countries and the Republic of Ireland, and films made in this country. Hitherto, films made in the Republic of Ireland and in the Commonwealth have been classified as British films from the point of view of quota and levy, and from the point of view of other considerations. But I think the situation is quite clearly changing, and this Bill, which, after all, makes legislation for a long time ahead, ought to take note of it.

There are very rapidly developing industries in Canada and Australia, in particular. Only recently, the Government of Australia introduced for the first time a Film Finance Corporation on a small basis, to subsidise local production. It has set up a planning committee, as we have done, to start its own National Film School, and is now beginning a move towards getting Federal legislation to impose a quota over the whole of Australia. Personally, I welcome that very much indeed. In fact, I was in Australia last year at the invitation of the Australian Government, and made some recommendations of this sort in a report to them. So I cannot do anything else but welcome them. On the other hand, if the industry is going to develop there, as I am sure it is—and I am only quoting that as one example—then clearly we have to take note of it. We have to ask—and I have no reason to think that we could not get them very easily—that there should be reciprocal arrangements between this country and Australia; in other words, we' should have from them a written assurance, a guarantee or whatever one calls it, that our films will be treated as Australian quota, just as we treat their films as British quota. I think that that kind of understanding should be extended to other Commonwealth countries.

There is also film development in the Republic of Ireland. They have recently introduced a new law whereby artists and writers and other such people can go there and pay either very low taxes or no taxes at all. So they are clearly making a great effort to attract and develop the film industry and other arts, and I think that we shall be making a mistake if we do not take note of that trend. This should not be interpreted as a hostile move against the Commonwealth or the Republic of Ireland. As I said, I am sure that they would very readily agree to the reciprocal arrangements which I have suggested.

We have a rather anomalous situation at the moment, whereby some films that have been sponsored by overseas Governments and Commonwealth countries come in for a share in the Eady money, so that, perhaps in an indirect way, we are helping to subsidise films; made on behalf of Commonwealth Governments. I personally do not object to that, and I do not share the fears of some people, such as were expressed in another place during the debate in Committee, that there is a danger that Commonwealth Governments may make anti-British pictures and may infiltrate our cinemas with hostile propaganda. I think that is non-sense. We simply have to take note of the fact that film industries are developing in those countries, that they are going to develop even more rapidly and that their labour costs are cheaper and may well attract production away from this country in time to come. Therefore what we want is the friendliest reciprocal equality between us such as we have always had with the Commonwealth. I beg to move Amendment No. 7.

5.51 p.m.

LORD DRUMALBYN

I wonder whether it would be convenient to consider my Amendment, No. 8, at the same time. My Amendment tackles the same problem as does the Amendment moved by the noble Lord, Lord Willis, but in a rather different way. In fact,. I confess freely that it was his Amendment which caused me to have a look again at Section 17, which I do not think I had looked at since I was myself at the Board of Trade. What I saw there made me wonder whether that section is really quite right now, for the present circum-stances, if indeed it ever was. Perhaps I may be allowed to go through the section, because it is very important.

What we are considering here is how far we should have reciprocal arrangements. I agree entirely with the noble Lord that having reciprocal arrangements is not in any sense to be interpreted as hostility. Reciprocity is indeed a mark of friendship. What Section 17 says— and I shall try to cut out the words which are not necessary—is: … a film shall be registered as a British film if either—

1. (a)it is made by or on behalf of a department of Her Majesty's Government in the United Kingdom, or by or on behalf of any Commonwealth Government or of the Government of the Republic of Ireland; or
2. (b)all the requirements specified in sub-section (2) of this section are satisfied with respect to it;…"

Subsection (2) then gives the requirements; and it is on these that the noble Lord, Lord Willis, seeks reciprocity.

The first point, which occurred to me, was that a film made by any Common-wealth Government or the Government of the Republic of Ireland is fine, but I am not so sure about the words "on behalf of". If it is made on behalf of one of those Governments it does not have to fulfil the requirements in sub-section (2). It may easily be made by a foreign company with foreign labour and foreign resources, and yet it is qualified to be registered as a British film. The noble Baroness may say that this has not happened very much so far, but once it has been drawn to the attention of Parliament it is very likely to happen. I think the noble Baroness will have to take serious account of this, because as the language stands it is wide open to this abuse—let us face it—and that abuse could come up at any time. So that is the purpose of the first part of my Amendment. I should add that, having asked myself, "What is the use of the words 'on behalf of' in connection with any Commonwealth Government or of the Government of the Republic of Ire-land?" and asked whether those words were right, I then wondered whether they were right in connection with Her Majesty's Government. I cannot conceive of Her Majesty's Government not con-forming with the requirements of sub-section (2), and therefore they are obviously not necessary in regard to Her Majesty's Government, either. So the words "on behalf of" can be dropped in both cases.

The second part of my Amendment deals with the remaining subsections of Section 17. Subsection (2) prescribes the requirements, and subsections (3), (4), (5) and (6) make various qualifications. So that nothing is missed out, I have added subsections (3), (4), (5) and (6) to the Amendment. But subsection (2) says: The requirements referred to in paragraph (b) of subsection (1) of this section are—

1. (a)that the maker of the film was, through-out the time during which the film was being made, either a British subject or a citizen of the Republic of Ireland or a company to which this paragraph applies; and
2. (b)that the studio, if any, used in making the film was in a Commonwealth country "—

which presumably includes Great Britain— or the Republic of Ireland; and (c)that not less than the requisite amount of labour costs represents payments paid or payable in respect of the labour or services of British subjects or citizens of the Republic of Ireland by persons ordinarily resident in a Commonwealth country or the Republic of Ireland. What my Amendment says is: The Board of Trade may by order vary the requirements … of the said section 17 so that, in effect, if any of the particular countries did not think that reciprocity was a good thing, then an order could be laid before Parliament to exclude that country. No doubt, of course, it would not be done as harshly as that. There would be a conference in the usual way to decide which countries wanted to be included and which countries did not; there would be an order in consequence, and it would be subject to Affirmative Resolution of the House. As we are legislating for quite a long time ahead, again it seems well worth while to include in the Bill as it now is something along the lines either of what the noble Lord proposes or of what I propose; and I hope the noble Baroness will consider the Amendments from that point of view without having too much regard to their perfection from the point of view of draftsmanship.

BARONESS PHILLIPS

The noble Lord has made the point that he hopes I will look at these Amendments from the point of view of their principle rather than their perfection; but as he will know as well as I, one has to look at the effect of the clause when one is de-bating it in this context. I will deal first of all with the Amendment moved by the noble Lord, Lord Willis, for which he made a very good case. The effect of the new clause would be to deny quota status to films made in studios in Ireland or in Commonwealth countries unless there were reciprocal arrangements. This is the other side of it. The question of the treatment accorded to these must be looked at in the context of our general commercial relations with those countries. The present arrangements have been in force for a long time, and the Government are unwilling to upset them in the absence of very strong reasons for doing so. I am not sure that the noble Lord has made out a strong practical reason for a change at the present time.

Figures were given in the other place, some of which, I thought, were slightly ridiculous. It was suggested, I think, that 1,700 films might be made during the next ten years which could be registered as British. The actual figures are that 17 feature films from these sources, the Commonwealth and the Republic of Ireland together, have been registered as British quota films during the last five years. I do not think any noble Lord could suggest that that constitutes a real danger. But I should like to stress that the Government are watching this matter all the time. However, they are equally concerned not to upset the good commercial relationship which exists, and therefore they would be very loth to interfere in any way with the legislation at this time. I would ask the noble Lord, Lord Willis, to accept that point. He may say that it is purely negative, but I am making a strong plea for what is good, commercial practice: that you do not upset an undertaking which is working satisfactorily at this time.

As regards the case made by the noble Lord, Lord Drumalbyn, I am afraid that, on his first point in connection with a film being registered as a British film and counting towards the British quota, the present wording of the Act allows such a film to be made, as he said, either by a Government itself or, as is more usual, by a film-maker commissioned for that purpose by a Government. If this section were altered in the way suggested by the Amendment the only Government films that would qualify as British films would be those made by a Government Department. In fact, most Government films are made not by Government Departments but by persons or companies commissioned by Departments, so the effect of the Amendment would be to disqualify the films so commissioned. Therefore I cannot accept the Amendment. I appreciate that this is on a drafting point; but this would be the effect of the Amendment.

On the other Amendment, No. 8, I know that both noble Lords will agree with me that the requirements for the qualification of a British film are central to the whole purpose of the Act. The main purpose of the Act is to provide for the screen quota, the purpose of which is to ensure that British quota films occupy at least a prescribed percentage of screen showing time, as already discussed. In this context, the definition of what constitutes a British film is central to the purpose of the legislation. The noble Lord's Amendment, No. 8, seeks to permit variation, by subordinate legislation, of the provisions which set out the requirements for qualification as a British film. The Government do not feel that this would be right. There are strong objections in principle to permitting variation by subordinate legislation of provisions which an; basic to the main legislation; and I feel sure that the noble Lord will see this point. As he said, we are making legislation for some time to come. I am sure he would agree that any basic change should be made by the legislation which affects the main Act and not by subordinate legislation. On these grounds, I would ask him to withdraw his Amendment.

LORD WILLIS

I am naturally disappointed at that reply. I must say that on the whole my sympathy goes towards the idea of withdrawing my Amendment and supporting that of Lord Drumalbyn. It seems to me to be some-thing the Government could accept. It does not alter the terms of the Bill at all. If paragraph 2 of Amendment No. 8 were inserted in the Bill its effect would simply be to allow the; Government to have a reserve power; and if the situation altered drastically in the Commonwealth or if somebody drove a coach-and-horses through the Bill, as the noble Lord, Lord Drumalbyn, said, it would be possible to rectify it quickly by Order. Therefore it seems to me to be something eminently reasonable. I do not intend to press my Amendment at this stage, but I would urge the noble Baroness to go back and consult to see whether there is not sense to this and whether an acceptable form of words could not be devised to meet the case. I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

6.4 p.m.

LORD DRUMALBYN moved Amendment No. 8:

After Clause 14, insert the following new clause:

Power of Board of Trade to vary requirements of subsections (2)-(6) of section 17 of the Films Act 1960

(" .—(1) In section 17 of the Films Act 1960 the words "on behalf of" wherever they occur in paragraph (a) of subsection (1) shall be omitted.

(2) The Board of Trade may by order vary the requirements specified in subsections (2), (3), (4), (5) and (6) of the said section 17 (requirements which have to be satisfied before a film may be registered as a British film), but no such order shall be made unless a draft thereof has been laid before Parliament and approved by resolution of each House of Parliament.")

The noble Lord said

Perhaps I may be allowed to say just a few words on this Amendment in the light of what the noble Baroness has said. In view of what she has said about drafting, I do not wish to press this Amendment, but I hope that she will look again at the point I made, which was that any Common-wealth Government film, or Government of the Republic of Ireland film, that was made in the Commonwealth or in the Republic of Ireland would surely—and this was the intention—have been allowed in if it conformed to the requirements referred to in paragraph (b) of the subsection. Then it would not matter who made it, whether it was the Government or anybody else. A film made by any Commonwealth Government or the Government of the Republic of Ireland is not excluded simply because they commissioned somebody else to make it; because if it is commissioned by some-body else, it will come within the requirements of subsection (2), so long as it were made in those countries or in Great Britain. I should be grateful if the noble Baroness would look at that intention.

As to the second part, I agree with what Lord Willis has said, and I am grateful for his support. But again I should not wish to press this Amendment if there were a likelihood that it might not be quite sound from the draftsmanship point of view. I should have thought it likely that in the next ten years we shall run into a period when we are in any event going to have a great many changes of relationships. I should have thought that it was wise to do something of this kind in order that we might maintain the necessary flexibility. I think that the noble Baroness read the Amendment more widely than it was intended to be used. The power taken may in fact be wider than the power you expect to use; although, as Lord Willis said, some-body might drive a coach-and-horses through the rest of it, and any Government would be glad to have the power of variation that this Amendment provides. The power of variation was the power in regard to nationality and locality; British subjects or a citizen of the Republic of Ireland or the place where it was made, and so on; it was in regard to variations of that kind. I should have thought that, in the light of the developments that we are likely to see, this is a power that the Government should consider very carefully. I think the noble Lord, Lord Strabolgi, wishes to say something, so I shall not withdraw my Amendment yet. I beg to move.

LORD STRABOLGI

I am grateful to the noble Lord, Lord Drumalbyn. I want to say very briefly that I agree with very much of what he has said on the second paragraph of his Amendment, No. 8. There is, I think, a great need for flexibility. On the other hand, as my noble friend Lady Phillips said, I do not think it right that this should be done by subordinate legislation. I realise that with this particular Bill we are being asked to pass a Bill which we hope will remain law for about ten years. But as Lord Drumalbyn knows, in the industry in the last twenty years there have been quite a number of small amending Acts—in fact, the last Schedule to this particular Bill lists them. I think that over the last twenty years there have been six Acts. It seems to me that there is no reason why the kind of flexibility which the noble Lord wants, and rightly wants, should not be secured by a small amending Bill when this is required. I think that everything my noble friend Lady Phillips said is right. With respect to the noble Lord, I am quite sure that that is the right way to approach it.

BARONESS PHILLIPS

I will give an assurance that I will look at the first part of the noble Lord's Amendment. His intention did not come over clearly, and my reply was based on a different inference, largely because of the drafting. On the second point, I will certainly take it back, but on this I cannot offer a great deal of hope because it is a very basic point. As my noble friend Lord Strabolgi has said, there seems to be no difficulty about providing amending legislation, and this has been done before. I think there is always an objection to subordinate legislation if it is something which is germane to the principal Act; but, as I say, I will take it back.

LORD DRUMALBYN

I am grateful to the noble Baroness for what she has said. I think there are advantages in flexibility. After all, this legislation was passed ten years ago, and we must presumably always envisage moving on to something else. I would draw her attention to Section 19 of the Films Act 1960 which provides: Her Majesty's Government may by Order in Council provide for treating films which are made in accordance with the terms of any agreement between Her Majesty's Government in the United Kingdom and any other government or any international organisation or authority, but with respect to which the requirements of this Part of this Act as to the registration of a film as a British film are not fulfilled, as if they were films with respect to which those requirements are fulfilled. So there is scope here for proceeding country by country within the Common-wealth with agreements of this kind, whether or not they comply with Section 17. I would not say, simply because power was taken to vary Section 17, that a radical change was going to be made. You might make a partial change with a particular country that did not feel able to comply with all the requirements here, or was not willing to give reciprocal facilities with regard to those requirements. So there is quite a lot which is worth looking at, I think, before the next stage of the Bill. In the meantime, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clauses 15 to 18 agreed to.

6.10 p.m.

LORD WILLIS moved Amendment No. 9:

After Clause 18, insert the following new clause:

Amendment of section30(l)(c)of the Films Act 1960

".In Section 30(l)(c) of the Films Act 1960 the words "if the film is a long film" shall be omitted."

The noble Lord said: Very briefly, this is an attempt to insert into the Bill a requirement which will enable us to get much more adequate information about short films and the rentals paid for them in cinemas than is at present available. I hope that the Amendment will com-mend itself to the Government. The situation is that we have had no information and no accurate figures about short films in cinemas since about 1954. Short films are becoming increasingly popular (by " short films " I mean anything, as defined in the Act, under 33½ minutes long) because of the longer films that are being made and because the double feature has gone out of fashion. Therefore, it is useful to exhibitors to have one fairly long film of 100 minutes and a half-hour short to go with it.

What often happens is that the two films are lumped together by one distributor and no separate figures are kept of what rental is paid for the short film. At some stage—certainly not tonight— think it would be useful if the House debated the whole position of short films. In this country there is a history of shameful neglect in respect of short films and a great deal more could be done. I am asking for this tiny Amendment which will simply require exhibitors and distributors to keep accurate records of rentals paid for short films as well as for feature films so that we may have a record of what was paid for them and what were the returns. I beg to move.

BARONESS PHILLIPS

The noble Lord, Lord Willis, has given the reason why a record has to be kept in respect of a long film and the rental payable; and the renter must produce that record if requested by the Board of Trade to do so. The noble Lord will know better than I the reason for this requirement. It is essential that the record of the rental should be available. The reason for the obligation on renters to keep records is in the Act. No such need arises in relation to other than first feature films and there could be no justification for imposing on renters an obligation to keep records which were not required for the purposes of legislation.

I think it important to preserve the principle that Departments should not be required, or authorised, to demand information which they do not need in order to perform their statutory duties. I hope that my noble friend will appreciate this point and withdraw the proposed new clause.

LORD WILLIS

I find that reply rather extraordinary, if I may say so. Short films play their part alongside ordinary feature films. There are a large number of individuals who make short films. Some of our best directors have graduated from making short films, people like George Schlesinger, who made Terminus. The situation now is that the short film is lumped in with the general first feature that is being played at a particular cinema, so that no accurate records exist. If one wanted to impose other parts of this Bill that are important, one would have no accurate records with which to do so. It seems to me that the acceptance of the Amendment could only help the implementation of the legislation. It would be very difficult to operate the provisions in the Bill efficiently and properly without this relevant information about short films, and I am rather flabbergasted by the suggestion that one does not need information about rentals paid for short films. That affects the Eady Fund, the distribution of the levy and a whole number of other areas covered by legislation. It seems to me that without this information it would be impossible properly to operate the provisions of the Bill and I beg the noble Lady to think again.

BARONESS PHILLIPS

What the noble Lord has said seems in direct conflict with the information that I have been given, that it is the rentals for first feature films which are recorded. The noble Lord suggests that the films are heaped together and therefore it is impossible to distinguish between the rentals. That is what I understood him to say, and that would alter the situation. But I think he will agree that it is only the first feature films about which the information is needed. If there is any conflict, it is determined on which is the longer of the films.

LORD WILLIS

If the noble Baroness will excuse me, and while I do not wish to keep the Committee too long on this matter, I should like to give one practical example. We have a system in which there are two big circuits which largely control the bookings in the cinemas. If you make a short film you are dependent on one or other of those circuits to show it. What has sometimes happened in the past has been that a circuit has said (and it is case of " take it or leave it"; one is hardly independent in the matter) " We will give you a lump sum for this short film." So you take a lump sum and they then have the film to distribute; it is theirs, they have bought it. They put it out round the cinemas and they charge because they are in their own cinemas. Sometimes they charge a rental which is out of all proportion in respect of a particular short film. That is one way in which the system operates and therefore it could be wrong.

Another way is that a film is distributed by a particular circuit, it does not get a full circuit release, and therefore it is affected under the Act because of the Eady Plan and so forth. It does not get to some favoured cinemas or it gets to some non-favoured cinemas. I could go on for a long time with this particular argument. I urge that the Government should look at this matter again, because I assure the noble Baroness that it does affect the implementation of the provisions in the Bill.

LORD DRUMALBYN

I think the noble Lord, Lord Willis, has made out a strong case. I suspect that at the same time as taking a look at this Amendment we should have to look pretty closely at the terms of the levy distribution. May I suggest that the noble Lord might withdraw his Amendment on an assurance from the noble Baroness, which I hope will be forthcoming, that the matter will be looked at before the next stage in the progress of the Bill?

BARONESS PHILLIPS

I think that in the circumstances the noble Lord might withdraw his Amendment. I can only repeat that my information is that when delivering a registered film it is required that a record of the rental shall be kept if the film is a long film; and that the record must be produced at the request of the Board of Trade. This seems in direct contradiction to what the noble Lord has said, but if he will withdraw his Amendment, I will look at the matter.

LORD WILLIS

I beg leave to with-draw the Amendment.

Amendment, by leave, withdrawn.

Clause 19 agreed to.

Clause 20 [Fees]:

On Question, Whether Clause 20 shall stand part of the Bill?

LORD DRUMALBYN

With Clause 20 we are in a rather peculiar position, because it refers to Section 44(3) of the Films Act 1960 which has two legs. The first leg deals with regulations prescribing the amount of any fees and it states in the subsection that they shall be so framed to secure, as nearly as may be, that the aggregate amount produced by those fees will be equal to the amount of the expenses incidental to the carrying out of this Act. It goes on to state the amount of the fees payable for those items specified in the Second Schedule, that is: On an application for the registration of a film … on an application to amend the register … on an application for a renter's licence —which is the most important— on an application for an annual exhibitor's licence in respect of a quarterly period ". All those are prescribed separately, and it is difficult to see exactly whether the effect of ruling this out means that the first part of Clause 44(3) is all that is left.

I take it that what is proposed here is that these fees, previously contained in the Schedule, will now be fixed by legislation, and the obligation in the first part of the clause will apply so as to make the fees meet the expenses incidental to carrying out this Act. I think that one is bound to ask what are the expenses incidental to carrying out this Act and what will be the amount of fees required in order to cover those expenses. I am obviously not asking for individual fees but for the level of increase in fees required to cover the increase of expenses in recent years. Perhaps the noble Baroness can tell us that.

BARONESS PHILLIPS

As the noble Lord has pointed out, the 1960 Act re- quires the Board to fix fees for the registration of films and exhibitors' licences as nearly as may be to meet the expenses of administration. At the same time, it lays down a maximum for the various fees. The present practice shows that legislation should not provide maxima and the Bill provides for their abolition to bring legislation in accord with the practice. It happens that the present fees, fixed in 1961, no longer produce sufficient to cover costs and an increase is needed. The Board of Trade has under consideration the level to which fees need to be increased to cover the expected cost over the next few years. I cannot give the figures and would merely say that at the moment they are out of proportion with fees laid down in other connections. But I can get the precise figures for the noble Lord, if he would like me to do so.

LORD DRUMALBYN

I think it would be helpful if figures could be obtained, because when passing legislation of this kind we should know the order of magnitude of the increases that are likely to result, especially as the phrase in the 1960 Act is itself not very clear. It says: … equal to the amount of the expenses incidental to the carrying out of this Act". The whole Act? I hope that the noble Baroness will look at that aspect.

BARONESS PHILLIPS

I will see whether I can get the information for the noble Lord.

Clause 20 agreed to.

6.25 p.m.

LORD WILLIS moved Amendment No. 12:

After Clause 20, insert the following new clause:

Amendment of Schedule 1 to Films Act 1960

". Schedule 1 to the Films Act 1960 shall be amended:—

1. (a) in paragraph 1
1. (i) by the substitution for the word ' twenty-two ' of the word ' nineteen';
2. (ii) by the substitution in sub-paragraph (a) for the word ' seven' of the word ' five';
3. (iii) by the substitution in sub-paragraph (b) after the word ' British' of the word ' financed ';
4. (iv) by the substitution in sub-paragraph (d) for the word ' five' of the word ' four'; and
83
2. (b) in paragraph 2 by inserting after the word 'Council' where it first appears the words 'and no person shall be appointed in any representative capacity who has an interest in any other representative capacity'."

The noble Lord said: This is the last of my Amendments and I shall be brief, because the matter was fairly thoroughly covered in the Second Reading debate. My Amendment intends to do two things: first, to take recognition of the fact that the C.F.C. have, under this Bill, greatly increased authority, even power. It is laid down that the Board of Trade must consult the C.F.C. at various intervals, and they are given increased status. It has been recognised with some feeling in another place, if not recognised outright by the Government, and in our Second Reading debate, that there may be a case for changing the composition of the Council. But it has been felt that it would be difficult so to do. It has been said that the balance has proved fairly right in the past and that we should leave well alone. But if we feel that a change ought to be made—and I think there ought to be a change—let us do it now, because we are legislating for ten years ahead.

My Amendment proposes that the number of exhibitors should be reduced by one, which would still leave them with a fairly hefty representation; that the number from the trade union organisations or professional associations should be increased by one, and that there should be an understanding that one person does not represent an organisation or function when he has a dual capacity. I am not saying anything against the individuals on the Council, because they try to carry out their duties without bias, but, human nature being what it is, we feel that the situation is quite wrong where one per-son, whom we all know to be a powerful exhibitor and distributor, represents the producers. We need to have people who represent one particular category. I know that that may be difficult at limes but it is not impossible to do this. That is the basic argument in favour of my Amendment and I beg to move.

LORD STRABOLGI

Before my noble friend replies, may I ask my noble friend Lord Willis if he will further explain one or two points about his Amendment. First, it is proposed to insert in sub- paragraph (iii) the word " financed " to make the 1960 Act read: Four shall be appointed as representing makers of British financed films. The definition of a British film is given in Clause 17 of the 1960 Act. I think it is a very good definition, but it does not necessarily say that the film has to be wholly British financed. What does my noble friend mean by a " British financed film "? Does he mean a film made here on a co-production basis or does he mean that every pound put into it must come from British sources? That is one point.

The other is that in sub-paragraph (b) my noble friend's Amendment proposes to insert after the word " Council ", where it first appears, the words set out on the Marshalled List. I think that it should be after the word " Council" where it appears for the second time, because if the proposed words of my noble friend appear after "Council" where it first appears, it will not make any sense at all.

There is also the question of the representatives of producers and exhibitors. I know that my noble friend has here in mind the two main producing and exhibiting companies. I think it is only right that representatives of those two companies should sit on the Council and I cannot see that there is any objection to that. As I think was said in another place, the members of the Council sit as experts on the industry generally. They can wear different caps and I think it is wrong to put them into completely closed compartments. I think also that the film industry owes a great deal to those two companies, with one of which I am associated. In fact, I think it is fair to say that they have kept the whole industry going for the last twenty or thirty years and even before the war. If it had not been for them, there would not be a British film industry. It is true that they are both embarking on fairly ambitious programmes of films, as I said on Second Reading, and I think it would be quite wrong to exclude them from the Cinematograph Films Council.

LORD WILLIS

Perhaps I may briefly reply to my noble friend. I think he has a point in regard to sub-paragraph (a)(iii) and the words " British finance ". But the purpose of this—and I would not press it—was to make quite sure that the Council was made up of people who were representative of the British film industry and not necessarily overseas producers and distributors who happened to be here operating in this country. This is not to say that I have anything against them, of course. One of the difficulties always in moving an Amendment of this sort is that one is accused, or the implication is there, that one is necessarily hostile to the big circuits. I do not regard them in quite the angelic light that my noble friend Lord Strabolgi does; on the other hand, I recognise the justice of his tribute to what they have contributed to British films. I certainly can-not accept that, but for them, British films would be dead, but it is fair to say that we should have a completely different kind of situation.

I think it is fair that the big circuits should be represented on the Cinematograph Films Council, but I do not think that they should be representative in one or two capacities as they are now, and for this reason: that there has been an increasing feeling on the C.F.C. that it has concerned itself in the past few years far too much with problems of exhibition and distribution and not with the problems of production. This new Bill will make it essential that they concentrate an equal effort on the question of production. It is for that reason that I have suggested this adjustment in the balance.

The balance may not be absolutely right. It may be that the Government have other ideas or suggestions; indeed, I hope that this is the case. But I think the principle is right. I feel strongly that it is wrong to say, as has been said: " Well, we know it is not quite right, but it is the best we can do so far. Do not let us tinker with it, because if we do other people will want extra representation. Let us leave something that is not very good well alone." We cannot do that for the next ten years, and that is why I wanted to air this matter by means of this Amendment.

BARONESS PHILLIPS

I should like to deal with this Amendment in its different parts: this is the only way, I think, that one can satisfactorily deal with a long clause of this kind. However, I shall be quite brief. My noble friend's Amendment seeks to change the constitution. First of all, he seeks to reduce the number of independent members. To substitute " five " for " seven " in sub-paragraph (a) would, in the view of the Government, provide for insufficient in-dependent representatives. I am sure that all noble Lords will agree that it is important to take into account public interest, as well as the interests of the industry, and for this purpose adequate independent representation is essential. Moreover, a qualification for appointment as an independent is that the person appointed shall have no such financial or commercial interest as is likely to affect him in the discharge of his functions as a member of the Council. This means that he must be independent of the industry, and so he brings, and can apply, knowledge and experience from other fields. The Government feel that the balance at the moment, of seven independents, is right.

I note that my noble friend does not wish to press this point about British finance, and I would only underline what my noble friend Lord Strabolgi has said: that this could have the effect of appearing to suggest that the American capital, which has been invested in the industry at some risk, is to our disadvantage. This we know to be not entirely the case, and we should not do anything to discourage American investment.

The third point is the question of reducing the number of exhibitor representatives. During the review of legislation all sections of the industry have been invited to express their views on future films legislation, and they responded with enthusiasm. It was no surprise that most sections wanted in-creased representation for themselves. I know that the noble Lord has said that this is no argument for turning down his Amendment, but it has some relevance in any kind of discussion that if you increase the representation of one group you automatically upset the balance and the others will immediately demand representation.

The Council itself, and the Government, have given careful consideration to these proposals for changes in the repre-sentation—it was not done lightly—and feel that the proposed insertion which relates to the dual capacity might be anomalous. For instance, the fact that a producer has interests in producing or in exhibition, or that a renter is concerned with production and exhibition, does not mean that he is incapable of being a useful or disinterested person on the Council, or of making disinterested contributions. On the contrary, he may take a very broad view. The Government are satisfied with the constitution of the Council, and I cannot hold out any hope of a change. I hope, therefore, that my noble friend will withdraw the Amendment.

LORD WILLIS

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Remaining clauses and Schedule agreed to.

House resumed: Bill reported, with Amendments.